What Every Investor Needs to Know About Portfolio Optimization: Podcast


Alpha: Alpha is used in finance as a measure of performance. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark which is considered to represent the market’s movement as a whole. The excess return of an investment relative to the return of a benchmark index is the investment’s alpha.

Book value: Book value of an asset is the value at which the asset is carried on a balance sheet and calculated by taking the cost of an asset minus the accumulated depreciation.

MSCI World: A market capitalization weighted index designed by Morgan Stanley Capital International to track the overall performance of commodity producers throughout the world.

Forecasting: The use of historic data to determine the direction of future trends.

Portfolio Optimization: The idea of an “optimal portfolio” comes from the modern portfolio theory. Among other things, this theory assumes that investors focus their efforts on minimizing risk while also striving to attain the highest possible return. According to this theory, investors will act rationally within these parameters, and that they will always make decisions with the goal of maximizing return for a given acceptable level of risk.

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Exp Date 4/30/2020